Chemical Engineering Plant Economics MCQ Questions & Answers

41

Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?

A) Multiple straight line method B) Sinking fund method C) Declining balance method D) Sum of the years digit method

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Answer & Solution

Answer: Option B

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42

Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

A) 1 B) 5 C) 10 D) 30

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Answer & Solution

Answer: Option C

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43

'Utilities' in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from __________ percent of the total product cost.

A) 1 to 5 B) 10 to 20 C) 25 to 35 D) 35 to 45

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Answer & Solution

Answer: Option B

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44

Pick out the wrong statement.

A) The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment B) Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost C) Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment D) In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)

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Answer & Solution

Answer: Option D

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45

A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs.

A) 40096 B) 43196 C) 53196 D) 60196

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Answer & Solution

Answer: Option D

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46

For a given fluid, as the pipe diameter increases, the pumping cost

A) Decreases B) Increases C) Remains the same D) May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian

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Answer & Solution

Answer: Option A

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47

The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.

A) Cash reserve B) Capital C) Turnover D) Investment

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Answer & Solution

Answer: Option C

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48

Operating profit of a chemical plant is equal to

A) Profit before interest and tax i.e., net profit + interest + tax B) Profit after tax plus depreciation C) Net profit + tax D) Profit after tax

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Answer & Solution

Answer: Option A

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49

A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs.

A) 121 B) 110 C) 97 D) 91

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Answer & Solution

Answer: Option A

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50

Which of the following is a component of working capital investment?

A) Utilities plants B) Maintenance and repair inventory C) Process equipments D) Depreciation

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Answer & Solution

Answer: Option B

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Chemical Engineering Plant Economics MCQ Questions & Answers | Chemical Engineering